API Networks, an important player in the history of the storied Alpha processor, is about to close up shop.

The Concord, Mass., company is winding down operations and will go out of business shortly, a victim of slow sales of the Alpha, a chip some thought superior to Intel's famous Pentium but that never caught on with manufacturers.

A few remaining API employees also cited as a cause in the demise Compaq Computer's June 2001 decision to license the Alpha to Intel and adopt Intel Itanium chips for servers. Although Compaq has committed to coming out with future versions of the Alpha, most Alpha engineers have already left Compaq to work on Itanium at Intel.

API Networks notified employees of the pending shutdown at the end of December, according to a statement provided to CNET News.com. At that time, API laid off much of its staff of about 100 employees. Layoffs continued in patches until now; about five employees are left with the job of settling accounts with suppliers and clearing out remaining inventory.

API Networks was a small, but historically significant, company in the universe of computers. The company was created by Compaq and Samsung in 1998 as Alpha Processor Inc. to help promote the Alpha chip, a 64-bit processor for servers originally developed by Digital Equipment, and to provide technological assistance to expand the chip's capabilities.

Though its technological contributions were considered excellent, the company landed few customers, said Terry Shannon, publisher of the newsletter Shannon Knows Compaq.

"It's unfortunate," Shannon said. "But given what happened to Alpha, I'm not surprised."

Throughout its history, API promoted Alpha mainly through engineering. The company developed and marketed a series of Alpha motherboards aimed at decreasing the cost of workstations and servers based on Alpha. It also sold its own Alpha-based computers.

API also established a relationship with Advanced Micro Devices. After the 1999 launch of AMD's Athlon, which uses the Alpha 21264 bus, API began work on an ambitious plan dubbed "Slot B." Though the plan revolved around building multiprocessor Athlon computers, APIs strategy was to create a motherboard that was compatible with both the Athlon and the Alpha. At the time, Athlon chips were packaged in cartridge-like cases and fit into a connector on the motherboard called "Slot A."

The Slot B approach would have been able to take advantage of the higher sales volumes of the Athlon chip and its standard motherboards to decrease the price of boards for Alpha, lowering system costs. But the plan never came to fruition. Not long afterward, AMD moved the Athlon to a new socket method of attaching the chip to its motherboards.

Despite its performance, which was considered by almost everyone to be superior to the Pentium, Alpha continued to flounder under Compaq. Then, in 1999, Microsoft dealt Alpha a serious blow by discontinuing support for the chip on its Windows NT operating system.

API quickly changed its game plan in 2000. It refocused on Linux, establishing a new division called API Networks to sell Alpha-based Linux servers. Soon, in November 2000, it changed the name of the entire company to API Networks.

But the efforts were not enough, even though API joined AMD in other promising projects, including a chip-to-chip networking protocol now known as HyperTransport. The protocol will become API's legacy, Shannon said. AMD plans to use HyperTransport in new chipsets for Hammer chips.

"What's good is that HyperTransport will live on," Shannon said.

HyperTransport will, indeed, live on; many of API's former employees, including about 35 engineers, administrators and executives, have gone to work for AMD.

AMD will open the doors on a new Boston Design Center next Monday. The center, located in Boxborough, Mass., will develop HyperTransport interconnects for servers for AMD's Computation Products Group.

Gerry Talbot, former president and chief technical officer of API Networks, was named director of the design center.

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